The Arkansas Insurance Department has issued a reminder that employers should not make direct payments for employees’ medical bills that were incurred on small workers’ compensation claims.
The department says it has become aware that some employers are doing just that, with or without the knowledge of their workers’ compensation insurer.
The department advised that “directly paying medical bills for injured employees may be considered a violation” of the section of the Arkansas insurance code that “deals with making materially false representations for the purpose of avoiding payment of the proper insurance premium.”
The department’s bulletin stated that some employers as well as insurers are under the “mistaken impression” that the deductible provision in the workers’ compensation policy “authorizes the employer to make direct payment on claims under the deductible amount.” Arkansas regulators, however, stated emphatically that is not the case.
“Even with an authorized deductible program, all claims must be submitted for ‘first dollar’ payment by the insurer,” the department’s bulletin stated. “The insurer will be reimbursed by the employer for any deductible amounts paid by the insurer.
“It is obvious that failure to report any worker injuries would affect an employer’s experience rating and payment of the proper premium” upon which that is based, according to the insurance department.
Any insurance professional with knowledge that an employer insured is making such direct payments is advised “to immediately notify the employer to cease this practice.”
The bulletin may be found online at: http://insurance.arkansas.gov/Legal%20Dataservices/Bulletins/10-2009.pdf.
Source: Arkansas Department of Insurance
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